Install

Arduinoscope

Debug with oscilloscope

Connect line sensor to oscilloscope, then try to find the best orientation to detect the contrast in reflection. For me this was under a ±45 degree angle with the plastic window of the water meter, I got a contrast of ±0.5V to ±2.5V.

Calibration

Once you are comfortable you know how the sensor works, mount it. Optionally use the potentiometer to adjust the digital out threshold. This should ideally be in the midpoint of the min and max voltage. For me this was at ±1.5V ((2.5+5)/2).